Maravi

Expert urges strategic use of copper revenues

Expert urges strategic use of copper revenues
By Kabanda Chulu in Kitwe
Sat 04 Sep. 2010, 20:10 CAT

MINING consultant Pius Maambo has challenged the government to urgently develop a strategy for the mining industry that will allow copper revenues to be used in driving other economic sectors.

And Tranter Mineral and Mining Exploration Company Zambia chief executive officer Sixtus Mulenga has challenged fellow Zambian entrepreneurs to take an active role in investing in the mining sector so that in the years to come there will be both Zambian and foreign-owned mining companies operating in the country.

During the ZICA Copperbelt chapter accountants forum under the theme 'How can the mining industry best contribute to economic development of the country - World practices' on Thursday in Kitwe, Maambo said the mining industry required a focused leadership that could create fair policies to benefit both the investor and the host country.

Maambo, who is chairman of Avantgarde Corporate Ventures and Mining and Technical Consultancy, said the Zambian government should emulate the courageous nature and straightforwardness of the Chilean government.

“According to the World Economic Forum, competitiveness of a country is defined as the ability by its government to provide prosperity to its people through raising standards of living by utilising the available natural resources. So there must be a development strategy for business to operate in.

In 1976 under military dictatorship, Chile decided that it should become the number one copper producer and that mining revenue should drive other economic sectors to enhance diversification as well as reducing dependency on copper and that poverty should be below 20 per cent and even under the current post privatisation era, successive governments are still implementing those strategies because they have brought benefits to people,” Maambo said.

“But Zambia has no mining strategy, hence no set targets to benefit from the mines and without having a strategy based on trust and respect where government and investors don’t sit down to discuss issues of low taxes and high production costs respectively, Zambia is creating symptoms of anarchy which is dangerous.”

He explained that Chile had developed a strategy whereby investors coming into the country would just follow what the strategy stipulates.

“Prevailing copper prices are not normal and are beyond projection hence referred to as windfall and this debate in the country about ‘windfall taxes’ shouldn’t have arisen because windfall are triggered beyond projection when you have an unexpected higher price hence Chile made a strategy whereby these investors will just follow and pay those taxes. It is part of the investment package and not a situation whereby government reacts to political pressure,” said Maambo.

And Dr Mulenga said the mining industry shall continue for a long time to come to be the engine of the Zambian economy, as the country follows the path of economic diversification.

“But the biggest challenge is for Zambian entrepreneurs to take active role in investing in the mining sector so that in years to come there will be both local and foreign-owned mining companies operating in Zambia and the outlook is favourable so long China and India keep this high drive for modernisation and economic development because among these two highly populated countries there is race for development,” said Dr Mulenga.

“The mining industry has played a key role in national economic development through consolidating and promoting partnership with all key stakeholders and providing a platform for development of local entrepreneurs in the forward and backward linkages in the supply chain to the industry.”

Labels: COPPER, MINING, SIXTUS MULENGA

posted by MrK @ 4:37 AM